LA’s largest 2021 office leases reflect effects of pandemic
Hulu notched largest deal, reflecting entertainment sector’s status as bright spot
Sometimes it takes a village of deals to notch some progress.
In 2020, the year of you know what, the largest office leases in L.A. County actually topped 2019 — a bright spot that offered some hope even as the overall state of the region’s office market was grim. The gain came in part on the strength of a massive lease: the 425,000-square-foot renewal by Walt Disney Company in Burbank.
This year, as the office market remained generally tough, no single deal approached the size of Disney’s renewal in Burbank. But this year’s top five deals combined to top last years, with a combined 1.23 million square feet against 1.08 million for 2020.
This year’s top five also offered a revealing picture of L.A.’s pandemic economy, where a new generation of media and tech companies is increasingly competing against legacy entertainment companies. This year’s top deal belonged to Hulu, a sign of streaming services’ continued boom, while the new media company Snap, whose signature app has also been gaining users, also made the cut. But even if the virus and economic shutdown threw a nasty wrench into television and movie production, this is still the home of Hollywood — evidenced by a major lease at one of L.A.’s most historic production lots.
Here’s the list for 2021, based on a TRD analysis of brokerage data provided by Newmark, along with news and market reports.
1. 2450 & 2500 Broadway, Santa Monica | Hulu | 351K sf
The streamer signed a seven-year lease for 351,000 square feet at the Colorado Center office campus in Santa Monica in June. Hulu already had space on the campus, and the new lease expanded it by 91,000 square feet.
The deal also provided more fodder for the ongoing streaming wars: In April, Roku signed a 72,000 square-foot lease at the same campus.
The 1.2 million-square-foot Colorado Center is owned by Boston Properties. Other Colorado Center tenants include Edmunds and Kite Pharma.
2. 2000 Avenue of the Stars, Los Angeles | Creative Artists Agency | 292K sf
Creative Artists Agency, a powerhouse talent agency that was founded in Beverly Hills and reaches around the world, renewed its lease for its headquarters at the Century City address in June. The complex is owned by Hines and JP Morgan Chase. CAA has been there since 2007.
But a couple months after CAA signed the four-year renewal, the firm acquired its rival ICM Partners — raising questions about its future locations.
After the deal CAA president Richard Lovett told the Hollywood Reporter that the companies “are all going to be in one location together as soon as time allows.” Between the two, CAA’s space is bigger, but it also had no vacant space at the time of acquisition; ICM, which leases a 100,000 square-foot office down the street, had only a small amount.
Cresa represented Creative Artists Agency in the June lease, and CBRE represented Hines and JP Morgan Chase.
3. 888 N Douglas Street, El Segundo | Beyond Meat | 281K sf
It was an eventful year for the alternative protein company Beyond Meat, which rolled out various new products — such as alternative chicken tenders — even as its stock plummeted by nearly half.
And in January, before the widespread rollout of vaccines, the company inked a 12-year lease at Hackman Capital Partners’ creative office complex in El Segundo. In order to close the deal Hackman provided a year of free rent and agreed to pay $100 per square foot on office improvements.
The lease was set to begin in the fall, with the space intended as the company’s new headquarters. JLL represented Beyond Meat, and CBRE and Newmark represented Hackman.
4. The Lot at Formosa, Hollywood | WarnerMedia | 161K sf
In October, HBO and HBO Max, part of WarnerMedia, entered a long term lease for a major production center in West Hollywood.
The Lot at Formosa , owned by CIM Group, is more than a century old and spans 11 acres, with multiple office buildings, sound stages, production buildings and parking lots. The campus has played a central role in Hollywood production, including as the filming location of “Pollyanna,” “Call of the Wild,” “Basic Instinct” and “Austin Powers in Goldmember,” according to the Hollywood Reporter. The lot’s offices have also been rented by luminaries including Howard Hughes, George Lucas and Oprah Winfrey.
HBO and HBO Max have produced at the site going back decades; after the announcement, a CIM principal characterized the lease as “an extension of the strong working relationship that we have developed over many years.”
HBO and HBO Max were represented by CBRE. CIM Group’s in-house team handled the transaction.
5. 3100 Ocean Park, Santa Monica | Snap | 145K sf
Snapchat’s parent company signed this lease in June. The agreement expanded the company’s headquarters at the Santa Monica Business Park by roughly half: In 2016 the tech company moved into the campus with a 300,000-square-foot lease. Snap moved into the business park in order to consolidate what had been a scattered workforce: At one point the company had leases at 14 different sites across Venice Beach.
The entire facility is roughly 1 million square feet, and owned by Boston Properties, which bought it in 2018 for $616 million. Earlier this year the video game giant Activision Blizzard moved out of the campus when its lease expired, leaving more than 200,000 square feet of space.